VMware honeymoon over despite strong growth
VMware’s love affair with tech investors appears to be over, despite the company posting strong growth figures.
The company’s fourth quarter earnings show a growth in revenue of 80% over the same quarter a year ago. However, the company’s executives predicted growth of just 50% for 2008, instantly sending jitters through the stock market, which is used to the company posting near 100% growth.
The company’s share price dipped heavily in after-hours trading, with its stock tumbling by as much as 25% at one point.
VMware executives have defended the company’s performance. “VMware executed at a remarkable pace in 2007 as customer interest and partner attention increased several fold,” claims Diane Greene, president and chief executive officer of VMware.
“As others begin to enter the market, VMware and our partners are continuing to broaden and deepen our highly reliable end-to-end virtualisation solutions.”
VMware has been the darling of the tech stocks since its highly-publicised IPO last summer. However, the company now faces increased competition in the virtualisation market from established industry figures such as Microsoft and Oracle, which drew a strong rebuke from VMware last autumn when it claimed its virtualisation software was three times more efficient than its rival’s.